Dynamics of the ruble exchange rate is now determined more by global risk appetite, than from the dynamics of oil prices or development of the situation with the pandemic in Russia. Measures taken by Central banks to stimulate the leading economies in a very short time has reduced interest rates to historic lows. Against this background, emerging market currencies got a good stimulus for the recovery by weakening the dollar, however, as stock indices. A defining moment for investor sentiment in the near future will be able to consolidate U.S. equity indexes above the 200-day moving average.

EURUSD aims to test the level of 1.1 on the statements of Merkel and the Macron on new measures to stimulate the EU economy and increase the quantitative easing program, which eliminates any earlier concerns about the future of the European Union. It is also interesting to note that the volatility for 1-month options on EURUSD has fallen significantly and is again around 6%. Another indicator of investors ‘ appetite for risk – the spread between 10-year government bonds of Germany and Italy – fell below 200 basis points for the first time since early April.

We expect that the main risk factors for the dollar and em currencies remain the US election and the escalation of rhetoric between Washington and Beijing. It is important to monitor the level of 7.2 in a pair USDCNY as a good indicator of risk.